The D.C. yoga community is working to convince lawmakers that the district’s so-called “yoga tax ” does not actually apply to yoga studios.
The law states the 5.75 percent sales tax, which takes effect Oct. 1, will apply to membership of a health club, defined as a “facility for the purpose of physical exercise.” Yoga instructors are arguing that physical exercise is not the purpose of yoga, and therefore a yoga studio does not qualify as a health club and would not be subject to the tax.
Members of the yoga community made their case to representatives from the Office of Tax and Revenue last week and, on Tuesday, they launched an effort to lobby D.C. council members. “None of us in the yoga community think the purpose is physical exercise,” Richard Karpel, president of Yoga Alliance, told CQ Roll Call in a recent phone interview. He later said, “Yoga is the union of the body, the mind and the spirit ... The idea, when you practice yoga, is to create that union.”
However, D.C. Council Chairman Phil Mendelson, who proposed the tax, said the yoga community is not in a strong position to make that argument.
“The yoga community was very much part of the opposition because they said [the tax] applied to them. So there’s no question they were considered to be included,” Mendelson told CQ Roll Call Wednesday. He later added, “It’s difficult to say, ‘Don’t tax me,’ and then when the law goes through anyway to say, ‘Oh, it doesn’t apply.’”
The official position of the Office of Tax and Revenue is that yoga classes are taxable.
Karpel was among the members of the yoga community who attempted to make their case to OTR last week, but he noted the OTR representatives seemed reluctant to change their stance without input from the council.
David Umansky, communications director for the D.C. Chief Financial Officer, confirmed in an email to CQ Roll Call that action from the council would be necessary to change the regulation.
“OTR is taking public comments on the regulation,” wrote Umanski. “It is conceivable that changes in the regulation will be made before it is finalized but that will require council action.”
Ian Mishalove, owner and director of Flow Yoga Center in Northwest D.C., said he was reaching out to fellow yoga instructors and students, encouraging them to call council members and emphasize that the purpose of yoga is not physical exercise.
“The new law takes effect next week and the big question still remains: Does that include yoga?” said Mishalove. “D.C. officials haven’t decided yet and having more people make the case will help.”
As part of their case, yoga instructors and students point to other states where studios have been excluded from similar taxes.
In Washington state, for example, the Department of Revenue ruled in 2009 that facilities that teach traditional yoga “do not constitute ‘physical fitness services’ because physical fitness is a secondary or incidental benefit of these classes, but it is not typically the primary focus.”
However, with the tax set to take effect next week, time is running out to clarify the regulation.
Should the yoga community fail to persuade lawmakers that studios are not subject to the tax, the community will then consider its next step in fighting the tax.
“Nothing has really been talked about beyond what this first effort would be,” said Mishalove, referring to the current effort to lobby council members. “There are potentially other avenues that could be pursued.”
Those avenues could include altering the tax through additional procedural tactics or questioning the law in the courts. Mishalove said, “We’re taking it one step at a time.”
Once the tax takes effect, if there is still confusion over whether yoga studios are included in the law, D.C. Mayor Vincent Gray said at a press conference Wednesday he would call upon the D.C. attorney general to clarify the language.
“If there’s some ambiguity in there about to whom [the tax] applies, we will seek a opinion from the office of the attorney general and move forward on that basis,” Gray said. Although Gray disagrees with the tax itself, he said he believed it would apply to yoga studios.
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